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Home / Business / Harvest Health sets the cannabis industry standard with $ 850 million purchase of multistate operator Verano

Harvest Health sets the cannabis industry standard with $ 850 million purchase of multistate operator Verano



(This story has been updated to include quotes from company officials and an analyst. For more analysis of this agreement, sign up for our new premium subscription service, Investor Intelligence.)

Arizona-based Harvest Health & Recreation reached a binding agreement to buy Verano Holdings of Chicago for $ 850 million, an agreement considered to be the largest acquisition that occurred in the US cannabis industry to date.

The deal surpasses previous record for a US acquisition in the cannabis industry – MedMen's $ 682 million share purchase of PharmaCann in October.

Both acquisitions are a sign that M&A activity will remain rapid in the cannabis industry, with several blockbuster agreements down the road.

At the conclusion, the All-stock agreement with Verano will give Harvest one of the largest footsteps among multistate cannabis operators with 123 dispensers in 16 states.

"The acquisition is the next step in Harvest to become the largest cannabis company in the world," said Harvest CEO Steve White during an investor conference.

Verano, who bought a Massachusetts cannabis company in February, was attractive to Harvest because it has stakes in 10 US operating facilities and more than 45 under development licenses.

Harvest trades at the Canadian securities exchange as HARV.

Under the terms of the agreement, which is set to close in the first half, Harvest is set to acquire:

  • Licenses and operations in 11 states and territories, including seven cultivation licenses, 37 retail licenses and the potential to reach more than 150 million Americans.
  • Portfolios of proprietary brands with more than 150 products SKUs sold in 150 retail outlets.
  • Cultivation operations in Illinois, Maryland and Nevada with expansion capacity of 900,000 square meters.

All told, the agreement puts Harvest in time to have over 70 dispensers, 13 cultivation plants and 13 production plants operating by the end of 2019, according to a press release from the company.

Details of the management after the agreement's closure are still being worked on, said White, Harvest CEO.

"This is really a group of non-ego-based people, and we're working through what we're talking about," he added.

The two companies first started talking about a potential merger in the summer of 2018.

The newly merged business will be "immediately acceptable", said autumn president Steve Gutterman during the conversation.

George Archos, founder, CEO and CEO of Verano Holdings, predicted "Participating in the Harvest brands will be an easy process."

Currently, Verano has dispensing operations in Illinois, Maryland, Nevada and Oklahoma, noted Archos, with permits and construction underway in Massachusetts and Ohio. [19659003] Several cannabis-related acquisitions are expected.

"We believe that the scope of this agreement underlines the rapid pace of US cannabis industry development and can serve as a catalyst for further large-scale consolidation," Matt Karnes, founder and managing partner of GreenWave Advisors, Marijuana Business Daily .

Lisa Bernard-Kuhn can be reached at [email protected] ] Nick Thomas can be reached at [email protected]


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